7/21/2009 @ 6:30PM

Apple Piles Up Profits

The economy may be bleak. Steve Jobs may be recovering from a liver transplant. His company
Apple
, however, is feeling fine. OK, except for maybe its chief operating officer’s undying hatred of netbooks.

First the numbers.
Apple
Tuesday reported net income of $1.2 billion, or $1.35 a share, for the quarter ending in June, compared with net income of $1.1 billion, or $1.19, during the corresponding period a year ago. Those results beat analyst expectations by 7 cents per share.

Sales rose to $8.3 billion from $7.5 billion during the year-ago quarter, also surpassing the $8.2 billion expected by analysts. Apple’s gross margin was 36.3%, up from 34.8% during the year-ago quarter.

Those numbers, while strong, understate Apple’s performance because revenues generated by Apple’s iPhone and Apple TV businesses are recognized over a number of years, allowing Apple to provide users with free software updates.

When adjusted to eliminate the impact of subscription-based accounting, Apple reported net income of $1.85 billion on sales of $9.74 billion.

Shares of Apple rose $5.63, or 3.72%, to $157.14 in after-hours trading Tuesday.

“We are particularly encouraged, considering the economic environment around us,” Apple Chief Financial Officer Peter Oppenheimer said on a call with investors.

Apple offered typically conservative guidance, predicting revenues of between $8.7 billion and $8.9 billion and earnings per share between $1.18 to $1.23.

Mac sales fell to $3.3 billion (2.6 million units) from $3.6 billion (2.5 million units) during the year-ago quarter. That’s in part because businesses were spending less money on Apple’s high-end professional models. “People that were buying those in small business accounts and commercial accounts were delaying purchases,” Apple Chief Operating Officer Tim Cook said in the earnings call.

Sales of iPods fell to $1.5 billion (10.2 million units) from $1.7 billion (11 million units).

Sales of iPhones rose to $1.7 billion (5.2 million units) from $419 million (717,000 units) during the year-ago quarter. Apple’s new iPhone 3G S has been a strong seller, Apple said. “We are currently unable to build enough iPhone 3G S’s to meet demand, and are working to address this,” Oppenheimer said.

Apple said nothing about the Jobs’ health. He returned from medical leave earlier this month after receiving a liver transplant. Nor did the Apple chief speak on the company’s earnings call.

Cook, however, still hates netbooks (See “Apple Hates Your Netbook“). “Some of the netbooks that are being delivered have technology that is old, they don’t have a robust computing experience, they have small displays and cramped keyboards. I could go on, but I won’t,” Cook said, before going on.

“That kind of thing I think many people will not be happy with, we are only going to play in something where we can be very innovative and that we will be proud of, he said.

Fair enough. Deliver results like those, and you can pile as much hate on netbooks as you like.